There was a time when Pakistani cotton was plentiful, internationally competitive, and an excellent investment for farmers. This low-cost and low water consumption crop was in demand both domestically and internationally. And why would it not be? Pakistan had a thriving textile business that exported to major international markets such as the Gulf, Europe, and the Americas, with many millers having major international clothing brands as clients.
But the glory days are a thing of the past. Just last week two stories hit the newsstands that paint a bleak picture of Pakistan’s largest export oriented sector. First, this paper’s sister publication, Profit, reported on multiple textile millers selling their machines to foreign countries because they were sitting by turning into scrap. There simply isn’t enough demand or enough cheap energy for them to produce yarn as they once did. The second story was about how cotton ginners across the country have gone on an indefinite strike to protest against new taxes and an “exorbitant” rise in the power tariff for ginning units.
There was once a time when textile was the undisputed King of Industries in the country. The country had a steady domestic supply of high grade cotton and plenty of clients not just in the Gulf but also in Europe and the United States that relied on Pakistan’s ability to produce clothes fast and export them. It is no wonder then that textiles are still the largest export oriented sector in the country. In fact, 2005 marked a milestone year for Pakistan with GMO cotton seeds being introduced in the country, and the highest ever recorded cotton production of over 1.4 crore bales.
But in the nearly twenty years since, something has gone wrong. Here is a sobering fact. Two decades ago, Pakistan’s cotton was in demand globally. However over those 20 years, countries such as Bangladesh, Vietnam and Cambodia have all surpassed Pakistan. In 2003, when Pakistan’s textile exports were $8.3 billion, Vietnam’s textile exports were $3.87 billion, Bangladesh’s were at $5.5 billion. Now Vietnam is at $36.68 billion and Bangladesh is at $40.96 billion, while Pakistan is struggling to hit $25.3 billion in 2022.
The reasons for this are manifold. Perhaps most significant in contributing to this was the energy crisis of 2008, which ended in the number of textile mills operating in the country falling from about 450 units in 2009 to 400 units in 2019. It was in this vacuum that countries like Bangladesh and Cambodia made their own space.
In the past few years there has been something of a small recovery thanks to Covid-19, where an anomaly of international trade meant Pakistan’s textiles were back in demand and farmers were also growing cotton. But that has proven a mere blip. In the year 2023, despite textile manufacturers making big bucks, textile exports in terms of volume actually dipped by 15% to $16.5 billion.
Until the government controls high energy prices and encourages the growth of cotton over water guzzling crops like sugar, the situation is not likely to improve.
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